Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
Canadian Dollar Under Pressure on NAFTA, Easier Oil Prices

Canadian Dollar Under Pressure on NAFTA, Easier Oil Prices

Martin Essex, MSTA,

Talking Points

- The US Dollar has been strengthening against its Canadian cousin since September 8.

- That trend has now halted but could well resume amid fractious NAFTA negotiations and weaker oil prices.

What Does the Fourth Quarter Hold for the Dollar, Equities, Oil and Other Key Markets? Find out here

The past month has not been kind to the Canadian Dollar and, despite a respite over the last few days, the currency could yet weaken further as NAFTA talks stall and crude oil prices ease back.

Canadian Prime Minister Justin Trudeau has been in Washington to meet US President Donald Trump, who wants substantial changes to the North American Free Trade Agreement between the US, Canada and Mexico. Trudeau said he was still optimistic about modernizing the trade deal and the Canadian Dollar has stabilized over the last few sessions, helped by a weaker greenback.

Chart: USD/CAD Hourly Timeframe (September 7 – October 12, 2017)

Chart by IG

However, the negotiations could easily fail, and that is likely to be bad news for both the Mexican Peso and the Canadian Dollar. In addition, both currencies are highly correlated with the price of crude oil, which is currently slipping back.

Chart: US Crude Oil Hourly Timeframe (September 28 – October 12, 2017)

Chart by IG

Oil prices have suffered from data released late Wednesday by the American Petroleum Institute (API) showing a surprise build in US crude inventories and gained little from a report by the International Energy Agency, released Thursday, suggesting the global oil market will be in balance next year despite rising output.

Crude has also failed to benefit from Trump’s likely move to decertify the international deal to curb Iran’s nuclear program; a decision that could make it more difficult for Iran to produce and sell its oil. That suggests underlying weakness that could well rub off on both the Peso and the Canadian Dollar.

--- Written by Martin Essex, Analyst and Editor

To contact Martin, email him at

Follow Martin on Twitter @MartinSEssex

For help to trade profitably, check out the IG Client Sentiment data

And you can learn more by listening to our regular trading webinars; here’s a list of what’s coming up

Check out our Trading Guides: Several new ones are now available including Forex for Beginners, Building Confidence and Traits of Successful Traders

Like to know about the Traits of Successful Traders? Just click here

Or New to Forex? That guide is here

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.